DOGE descends on FDIC in federal downsizing push  

Al Drago/Bloomberg

A team of Department of Government Efficiency employees are working to restructure the Federal Deposit Insurance Corp. alongside the banking agency's management, according to an email obtained by American Banker.

According to the email, sent internally Thursday afternoon to FDIC staff by Dan Bendler, the FDIC's Deputy to the Chairman and Chief Operating officer, a small cohort of full-time government employees within DOGE are collaborating with FDIC leadership to advance the administration's efforts to downsize the federal bureaucracy.

"As you are aware, the FDIC leadership team has been working to identify areas in which we could increase efficiency to better serve our constituents and stakeholders," Bendler wrote.  "A small team from the Department of Government Efficiency (DOGE) is working with us to support these management-led efforts."

The FDIC declined to make a formal comment on the matter.

DOGE's descent on the bank regulatory agency marks the latest effort by the Trump administration to shrink the size of the federal government and personnel. The FDIC did not disclose further details about the size of the team assigned to the regulator or the scope of the reforms under consideration.

The FDIC clarified that the DOGE personnel are full-time federal employees who have received what the agency described as "appropriate clearances" and are working with FDIC management under "formal interagency agreements." In its internal communication, the agency also noted that sensitive bank information was not currently being shared by the two parties, nor had it been requested. 

DOGE's involvement at the FDIC follows a wave of contract terminations and spending reductions across federal housing and financial oversight agencies. Since early March, DOGE has eliminated a broad range of vendor contracts at the Department of Housing and Urban Development, the Department of Veterans Affairs and the Consumer Financial Protection Bureau, including by targeting services related to oversight, program administration and institutional support. While the agency frames the cuts as efforts to eliminate waste, its critics warn they could disrupt essential operations at agencies.

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Senators Elizabeth Warren, D-Massachusetts, and Adam Schiff, D-California, have called for DOGE, an agency which has been heavily advised by Elon Musk, to step away from agencies like the CFPB. In a letter to acting CFPB Director Russell Vought and Treasury Secretary Scott Bessent in February, the lawmakers argued Musk could benefit personally from dismantling the bureau, which oversees both his digital wallet company X and Tesla's auto lending business.

Bank regulatory veterans like former Comptroller of the Currency Gene Ludwig have advised policymakers to avoid gutting the bank regulatory framework in the name of reform. Writing in American Banker, Ludwig warned in February that meaningful modernization requires "a scalpel, not an axe," and cautioned against blunt deregulation that could spark another financial crisis.

The DOGE team's focus at the agency could include reductions in FDIC personnel or eliminating contracts. The FDIC has already shed hundreds of staffers  due to employees accepting deferred resignation offers as well as voluntary resignations and retirements. 

The National Treasury Employees Union — which represents employees from 37 departments and offices, including FDIC staff — has criticized DOGE's efforts. The American Federation of Government Employees also sued the Trump administration in February, challenging mass firing of probationary employees.